Boucher v. Wal-Mart Canada:   The Ontario Court of Appeal Rocks the Wrongful Dismissal World

On May 22, 2014 the Ontario Court of Appeal (OCA) released the Boucher v. Wal-Mart Canada decision. It could rock the wrongful dismissal world.

This decision appears to be on a collision course with the Supreme Court of Canada’s 2008 decision in Honda Canada Inc. v. Keays decision.

In the Honda case, a disabled employee was awarded, among other things,  $500,000 punitive damages, 15 months’ pay in lieu of reasonable notice, and nine months’ Wallace (or aggravated) damages at trial. The Ontario Court of Appeal reduced the punitive award to $100,000 and the Supreme Court of Canada (SCC) reduced both the punitive damage and Wallace damages to $0. Thereafter, many employment lawyers believed the SCC had basically closed the door on punitive damages and Wallace damages in wrongful dismissal actions.

In the Wal-mart case, a jury ordered Wal-mart (and a supervisor) to pay significant damages to an employee who was treated badly by a supervisor and Wal-mart. The resulting stress caused physical symptoms including abdominal pain, constipation and weight loss.  She vomited blood and could not eat or sleep.  Among other damages, Wal-mart was ordered to pay $1,000,000 in punitive damages, $200,000 in Wallace (or aggravated) damages, $100,000 in vicarious tort damages, constructive dismissal damages, and over $140,000 in court costs.

The OCA upheld the $200,000 Wallace damages, the $100,000 tort damages, the constructive dismissal damages, and the legal fees.

Because Walmart was liable for significant compensatory damages, its misconduct lasted less than six months, and it did not profit from its wrong the OCA reduced the punitive damage award from $1,000,000 to $100,000.

At this point in time, we do not know whether Wal-mart will appeal the Bouchard decision to the SCC. If so, the SCC will be asked to “clarify” the Honda decision in terms of when “punitive” damages and “Wallace” damages can be awarded. In addition, we suspect Walmart would ask the SCC to clarify when an employer can be found vicariously liable for the tort of the intentional infliction of mental suffering because of a supervisor’s actions.

In the meantime, we anticipate that some employee counsel will start seeking punitive damages, aggravated (or Wallace) damages, and damages for the intentional infliction of mental suffering in wrongful dismissal claims that have only a scintilla of evidence to support these damage claims.

As a result of the OCA’s decision, we expect wrongful dismissal settlements will be increasing in Ontario in the short-term.

For other blogs about wrongful dismissal, see here.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been representing employers and employees in wrongful dismissal actions. If you require representation, please contact him at 416 317-9894 or by email at [email protected]